Historically, the worst bear markets happened amid extreme market valuation or lengthy economic recession, or both. After eight years of economic expansion, the US economy is close to the late stage of the current boom cycle. The current high valuation is certainly a cause for concern. While it is hard to predict exactly when the bear market will happen, high valuation, together with a possible economic recession will likely make the bear market more severe when it finally materializes.
Michael J. Panzner, author and 25-year Wall-Street veteran, says that "the real reasons behind the sell-off ... include the bursting of history's biggest housing bubble, which triggered a shockwave of wealth destruction that has wreaked widespread havoc throughout the economy, as well as the unraveling of a multi-trillion-dollar financial house of cards built on greed, ignorance, and fraud."
With the U.S. stock market going through a volatile phase, investing in big-brand companies seems judicious. These stocks will offer some respite as they boast stable cash flows. Needless to say, the value of brands is that they instantly convey information on quality, durability and consistency to consumers. These traits help stocks counter market gyrations. And if the market pulls itself up in the near term, such companies will make the most of the positive trend as their products and services are widely accepted.
"We believe 2018 marks the beginning of a wide trading range (2400-3000) that could last several years. While the price damage may not be extreme at the index level, it may feel and look a lot like a bear market. We think this "rolling bear market" has already begun with peak valuations in December and peak sentiment in January. We have a mid-June 2019 target for the S&P 500 of 2,750," Wilson says.
As the bull market of the 1990s has turned into the bear market of the (early) 2000s, households have sharply reversed their more than decade-long trend of increasing their share of assets held in stocks. On balance, households have reallocated their assets away from stocks and toward tangible real assets, such as housing and other durable goods, as well as toward safe liquid financial assets, including cash, bank deposits, and money market mutual funds.
To the surprise of many investors, the precious metals have rallied while the broader markets continue to sell-off. Currently, both gold and silver are solidly in the green while the major indexes were all the red following a huge sell-off yesterday. The Dow Jones Index has lost nearly 1,000 points in the past two days while the gold price is up nearly $25.
“Exhilarating...You’d have to be numb not to be impressed by the scale of [Clancy’s] ambition, his feel for the way information now flashes instantaneously across the globe, his mastery of technological developments. No other novelists is giving so full a picture of modern conflict, equally adeptly depicting those at the top and bottom of military and intelligence systems.”—The London Sunday Times
Investing legend Bill Miller said in his latest letter to investors this week, "I believe that if rates rise in 2018, taking the 10-year treasury above 3 percent, that will propel stocks significantly higher, as money exits bond funds for only the second year in the past 10. ... Bonds, in my opinion, have entered a bear market," Miller wrote, but he added, "one that is likely to be benign for the next year or so."
This article considers the juxtaposition of colliding worldviews and the unified message that voters across the political spectrum are sending. While many investors are aware of the political change afoot, it seems that very few have considered how said changes might affect the economy and financial markets. In this article, we share some of our thoughts and encourage you to give the topic more consideration going forward. Read More
A very long and unnecessarily drawn out novel which included too much detail about war planning and the various weapons used. U.S. casualties were unrealistically low. Author did not recognize the U.S. National Missile Defense system. Not believable that the Russians would allow the Chinese to retreat from their soil without retribution. I read the book to the end to find out what would happen; it held my attention. This book is not up to Clancy's past books for credibility.
The theme of investing in a rising interest rate environment is not new; in fact, it has been overhyped in years past, most notable during the taper tantrum. But Goldberg said there has been so much literature from asset management companies stating case for bonds in a low interest rate environment they now should find it harder to justify bonds when the interest rate environment changes.
In any event, fixing to borrow upwards of $1.2 trillion in FY 2019, Simple Steve apparently didn't get the memo about the Fed's unfolding QT campaign and the fact that it will be draining cash from the bond pits at a $600 billion annual rate by October. After all, no one who can do third-grade math would expect that the bond market can "easily handle" what will in effect be $1.8 trillion of homeless USTs: Read More
Outside the United States, many other countries in the world also issue similar bonds, sometimes called local authority bonds or other names. The key defining feature of such bonds is that they are issued by a public-use entity at a lower level of government than the sovereign. Such bonds follow similar market patterns as U.S. bonds. That said, the U.S. municipal bond market is unique for its size, liquidity, legal and tax structure and bankruptcy protection afforded by the U.S. Constitution.
A bear market occurs when the major indices continue to go lower over time. They will hit new lows. More important, their highs will be lower than before as well. The average length of a bear market is 367 days. The conventional wisdom says it usually lasts 18 months. Bear markets occurred 32 times between 1900 and 2008, with an average duration of 367 days. They typically happened once every three years.
The Trimtabs CEO said that, even accepting the argument about annual rebalancing and the fact that an aging demographic has greater need for income investments, investors could choose to go into cash or cash equivalents instead of bonds likely to go down in value. Some bank certificates of deposit are now yielding as much, in some cases more, than Treasurys. "There are other asset classes than stocks and bonds," Santschi said. "There's cash, real estate, commodities, precious metals."
The central bank and investment banks have the power to crash the market right before the midterm elections to influence voting. I have seen this pattern repeated with both Ronald Reagan and George Bush, and we could be seeing it repeating once again for Donald Trump. The Fed and its dealer banks battle against Republican administrations, especially when they hold both houses of Congress, too.
Phil Town is an investment advisor, hedge fund manager, 3x NY Times best-selling author, ex-Grand Canyon river guide and a former Lieutenant in the US Army Special Forces. He and his wife, Melissa, share a passion for horses, polo, and eventing. Phil’s goal is to help you learn how to invest and achieve financial independence. You can follow him on google+, facebook, and twitter.
It’s important to remember that a bull market is characterized by a general sense of optimism and positive growth which tends to catalyze greed. A bear market is associated with a general sense of decline which tends to instill fear in the hearts of stockholders. As Rule #1 investors, we act opposite of the investing public – when it comes to bull vs bear markets – and capitalize on their emotions by finding quality stocks at low prices during bear markets and selling during bull markets when they’ve regained their value.
Bear markets typically begin when investor confidence begins to wane following a period of more favorable stock prices. As investors grow increasingly pessimistic about the state of the market, they tend to sell off their investments in order to avoid losing money from the falling stock prices they anticipate. This behavior can cause widespread panic, and when it does, stock prices can plummet. When this happens, trading activity tends to decrease, as do dividend yields. At some point during a bear market, investors will typically try to capitalize on low stock prices by reinvesting in the market. As trading activity increases and investor confidence begins to grow, a bear market can eventually transition to a bull market.
In 1979, President Carter's administration ceased diplomatic recognition of the government in Taiwan as independent of mainland China, as the U.S. and China normalized relations. The Chinese government has a "One China" policy, where the role of Taiwan is concerned. As for Taiwan, the "island province" is more than autonomous, the island has its own government and its own head of state.
Add another nail into our society. Education isn’t to raise the cultural level of society, it’s ONLY to get a job. SAD. I suppose Taco Bell and MacDonalds should make prep “colleges” for thier future employees. That way they can work their “education” off and not receive wages. My good God, look at how enslaved we are as a people, yet we still vote against our own benefit. Sad. My $20,000 credit card that was used to try and stay in a over-priced home, I walked from, but if it was used to educate me, I would be bound forever. Anyone see a problem here?
That was the slogan used by then-presidential candidate Donald Trump and it propelled him to the most powerful and coveted job in the world – commander in chief of the United States. However, since Trump’s inauguration there has been much blustering and many unpopular policies that don’t seem to have been made with the promise of making America great again.
The past few days have highlighted nervous investors are sensitive to policy changes by the European Central Bank and the Bank of Japan, widely viewed as the most accommodative central banks in the world. Treasurys came under pressure earlier in the week after the Bank of Japan trimmed its monthly buying of long-dated government paper, drawing speculation that the move could herald a tapering to its assets purchases.
There is a quiet revolution taking place in the monetary vacuum that’s developing on the back of the erosion of the dollar’s hegemony. It is perhaps too early to call what’s happening to the dollar the beginning of its demise as the world’s reserve currency, but there is certainly a move away from it in Asia. And every time the Americans deploy their control over global trade settlement as a weapon against the regimes they dislike, nations who are neutral observers take note and consider how to protect themselves, “just in case.”Read More
During the bear market a heavy debate ensued as to whose fault the falling market was. The political parties were heavily divided during this period. For the most part there were three camps: ones that simply blamed the economy, others that wanted to pin the passing Bush Administration and others that wanted to push the blame on the newly arriving Obama Administration.
The past two years have seen a rather aggressive change in corporate policies toward the very customers they used to covet. Not long ago, CEOs tended to keep their political views mostly in the closet. Companies remained publicly neutral because their goal was first and foremost to make money. When they wanted to influence politics or social norms, they bought politicians — you know, the good old-fashioned way. The big banks still do this by funneling cash to both Republicans and Democrats alike
The above shows how Vanguard is just lucky to operate in the U.S. where the economic growth has been a bit stronger than in the Netherlands, and it enjoys the self-reinforcing effect of $2 billion coming into the market every day. However, the bulk of Vanguard’s success was made in the 1980s and 1990s, while the returns since 2000 have been minimal.
Extreme optimism just before the sell-off. We may not be there yet — but earlier this week, many of the largest companies were scoring 52-week highs, like Microsoft and Facebook. And according to this WSJ story, hordes of new individual investors have been diving into the stock market this year, finally shaking off their fear from 2008. It may not be “irrational exuberance” yet — but it’s trending in that direction
Now, entrepreneurial creativity and innovations are not going to make it into any models that economists can concoct. Because we simply do not have the tools to model that kind of complexity. Let’s dive into George’s theory of “an economics of disorder and surprise that could measure the contributions of entrepreneurs,” and extrapolate out what it means for us.
Food programs are widely considered welfare to the people using them. In fact they are welfare to the food industry: it is a direct transfer of government (tax) bling to the pockets of General Mills, General Foods, Cargill, ADM, Monsanto, and the other Big Food/Big Pharma companies. It is tax bling to the grocers as well. These companies can keep marking up food for profit, squeezing those who pay money for it AND pay taxes so those who can’t afford the food can give Munchy Bucks to their local food vendor, and those dollars are credited to the food industry.
“The distinction [between globalization and technology] is arbitrary. What distinguishes the technological revolution is precisely that things like iPhones could be designed in California but made in China. The paradox of the Liberal International Order is that it made a lot of technology affordable, while at the same time destroying manufacturing jobs.”
The US bear market of 2007–2009 was a 17-month bear market that lasted from October 9th 2007 to March 9th 2009, during the financial crisis of 2007-2009. The S&P 500 lost approximately 50% of its value, but the duration of this bear market was just below average due to extraordinary interventions by governments and central banks to prop up the stock market.
A high-level assassination attempt in Russia has the newly elected Ryan sending his most trusted eyes and ears—including antiterrorism specialist John Clark—to Moscow, for he fears the worst is yet to come. And he’s right. The attempt has left the already unstable Russia vulnerable to ambitious forces in China eager to fulfill their destiny—and change the face of the world as we know it...
The entire defense sector reports this week. At least the big guys do. Margin compression and the potential for lost contracts weigh heavy on these stocks right now. This is one area where I will be slow to withdraw amid weakness. Domestic and allied monies intended for this space will not draw down in a Cold War environment. Lockheed Martin (LMT) reports this morning. The numbers should be good. However, the firm has a number of deals in place with Saudi Arabia. My plan is to wait for the call before doing anything stupid. Boeing (BA) , General Dynamics (GD) , and Northrop Grumman (NOC) all report tomorrow morning, while Raytheon (RTN) will go to the tape on Thursday morning.
Early on, people who knew a lot about FISA pointed out that the FBI’s investigation of “russia collusion” was not a criminal investigation but a counterintelligence investigation. I guess the rules for each type are different. For example, in a counterintelligence investigation the goal could be to identify all of the members of a given spy network etc. So, perhaps Page was simply their Trojan Horse / excuse to spy on many many people.
So I have been rolling this whole mess around in my head: Trump wins the RNC nomination. Hillary wins the DNC nomination by cheating over Bernie via the great “Super Delegate Scandal.” DNC comes up with a plan to dig up dirt on Trump via Steele and his Russian contacts. Steele apparently fails to come up with anything substantial or is too incompetent to understand his lies will not hold water when looked at closely and so publishes the phony baloney Russian Dossier. DNC and Clinton via Steele and Fusion GPS worm their way around the FBI and FISA courts and get a FISA warrant on a low-level Trump flunky Carter Page. Page is promptly removed from the Trump campaign. Using the FISA warrant, FBI spies on Trump and apparently finds nothing. Hillary email scandal erupts. Comey states Hillary is guilty as hell but no one will prosecute so no charges are brought up. DNC calls for Comey’s head. Trump wins the election and becomes POTUS. Trump appoints Flynn, then promptly fires him when he finds out he is compromised. Comey is outed as a corrupt idiot and so Trump fires him. DNC cries foul about firing Comey, even though they were literally calling for his head 6 months previous for his coverage of Hillary email scandal. DNC screams for a special council, Sessions recuses himself for no reason (clearly making POTUS Trump angry), and so deputy AG Rosenstein (who signed off on the junk Russian Dossier FISA warrant) assigns his and Comey’s good friend Muller to lead the investigation (clear conflict of interest on multiple fronts). Muller investigates for a year and finds nothing of substance (except completely unrelated crap on Flynn and a few others). Nunes investigates and finds out everything above (it is not even hidden very well). Nunes wants to release the memo. DNC balks badly and ultimately fails. The memo is released.
As contentious as the US midterm elections were, there was never a scenario in which they mattered. Any possible configuration of Republicans and Democrats in the House and Senate would have yielded pretty much the same economy going forward: Ever-higher debt, upward trending interest rates and (through the combination of those two) rising volatility.